IFRS 17 - Insurance contracts

The International Accounting Standards Board (IASB) is close to finalizing IFRS 17 (formerly known as IFRS 4 Phase 2) as the majority of the requirements have been tentatively agreed upon by the Board, including those for the detailed and complex presentation. IFRS 17 is likely to include certain disclosures from the existing standard, IFRS 4, in addition to several new presentations and disclosures. The goal is to improve the comparability and increase transparency in accounting for insurance contracts. The standard is expected to be effective approximately three years after the issuance of the final standard (beginning 2020) and will be confirmed later this year. The standard is not only applicable to pure insurance entities, but all entities that issue insurance or reinsurance contracts.

2019
2020
2021
2022
2023
2024
3
4
1
Implementation / enforcement 01/2013 - 06/2013
2
Discussion / consultation 06/2013 - 02/2017
3
Implementation / enforcement 02/2017 - 01/2020
4
In effect 01/2020 -

STATUS
Staff of the IASB has started drafting the final standard, issue date around end 2016.

For insurers, it would be important to fully understand and determine the financial information presented and disclosed in their public financial statements before designing and developing systems and processes to meet the new reporting requirements. Another important strategic dimension to be considered is how stakeholders may respond to the new information presented. There are a few fundamental differences between IFRS 17 and Solvency II. Thus, despite a successful implementation of a modern solvency system, further action would be needed to address the new requirements. Many insurers, especially those that will apply the Building Block Approach (BBA), would require to use all of the available time for implementation, given the complexity of the new requirements.

Further information:
Accounting change voor verzekeraars
Verandert Free Capital Generation met de komst van IFRS 17?

author
Erik Bleekrode Partner
Categories: Insurance Market Organisation